John Hansen: “if I told you that you owed me $50 a month for 30 years would you pay it if you did not have to? If you answer yes, I…”

“if I told you that you owed me $50 a month for 30 years would you pay it if you did not have to? If you answer yes, I have some private mortgage home insurance [PMI] for you. But if no is your answer, then why are thousands of people doing it? Private mortgage insurance [PMI] is to provide lenders--or the ultimate purchaser of a loan--protection against a home owner's non-payment. The insurance typically insures a percentage of any potential loss. The majority of people buying homes nowadays put down less than the traditional 20 percent of the home purchase price. As a result, many of these homeowners have accepted the fact that they have to commit a part of their monthly home mortgage payment--typically $50 to $90 to pay for mortgage insurance. The problem arises when the homeowner overpays private mortgage insurance; can't cancel the PMI; or is not told that they have the right to cancel it. It is not a new problem, but one that has made many servicers and insurers rich. It has been going on for years. What makes private mortgage insurance even more sinister is that those who are mostly taken by it are the ones that need the money most, once they are not required to pay it.”